New Mexico Auto & Property Coverage Requirements
This chapter covers the coverage rules a New Mexico producer must know to place personal lines correctly: the state's compulsory-insurance requirement, the role of uninsured/underinsured motorist coverage, and how auto claims are generally handled.
Compulsory Liability Insurance
New Mexico requires drivers to carry auto liability insurance and to be able to show proof of coverage. The statutory minimum split limits (bodily injury per person, per accident, and property damage) are set by law and can be raised by the legislature, so a producer should confirm the current figures with the New Mexico OSI or Motor Vehicle Division before quoting them as fixed. Insureds may and often should buy limits well above the minimum.
Uninsured and Underinsured Motorist Coverage
Uninsured/underinsured motorist (UM/UIM) coverage pays the insured's own bodily-injury damages when an at-fault driver has no insurance or not enough. Producers should explain that this protects the policyholder and covered occupants, not the other driver. Whether New Mexico requires UM/UIM to be carried or merely offered, and at what limits, is set by statute and should be verified with the New Mexico OSI.
How Claims Are Settled
New Mexico follows the traditional at-fault (liability) approach for auto claims rather than a no-fault system: injury and damage claims are generally pursued against the driver responsible for the accident, with UM/UIM filling the gap when that driver is uninsured or underinsured. Because states periodically revisit their auto systems, confirm the current framework and any changes to minimum limits with the New Mexico OSI when advising clients.